The Confluence of Local Property Tax Policy and Central Personal Income Tax Policy
The Confluence of Local Property Tax Policy and Central Personal Income Tax Policy

Summary/Abstract: Theoretical background: In public economics, there is well-established research on the fiscal efficiency of local tax sources (fiscal capacity) and the sensitivity of local authorities' tax revenues to changes in the parameters of their local tax policy (fiscal stress). However, there is a need for a critical approach to these characteristics in the conditions of the division of tax authority between central and local authorities, in particular regarding the application of a hybrid model combining the shares of local authorities in taxes that are the subject of central tax policy (personal income tax) and local tax authority over property taxation. Purpose of the article: There are no indicators for identifying the relationship between changes in personal income taxation policy and local property taxation policy. Therefore, the theoretical goal of the article is to develop indicators for determining the willingness and ability of local authorities to compensate for the undesirable fiscal effects of the personal income taxation policy pursued by the central authorities. The research goal of the article is to evaluate the differentiation of these indicators in municipalities in Poland. Research methods: Drawing conclusions based on the estimated basic parameters of statistics of the developed pressure and capability indicators for the population of Polish municipalities; distinguishing the subpopulations of urban municipalities, urban-rural municipalities, rural municipalities, and cities with county rights, both in the temporal and spatial dimension.

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